Volex Share Discussion Threads

[igoe104] 28/6/2024 14:03

IC Podcast. VLX talked about (10 minutes in)

[valhamos] 28/6/2024 11:04

I thought the Investor Meet presentation was excellent as usual. The key for me was the continued investment VLX is making in long-term business growth. Already they have a 25% increase in capacity coming on stream within a few months following investments in response to customer requirements. And then the increased capex (to 5% of revenue) announced for this year is in respect of several projects which will come online from next year onwards.

[pcok] 28/6/2024 10:59

Very confident webinar based on solid numbers and trends. I will be adding. The world is becoming increasingly electrified and the more complex solutions create high barriers to entry. This is becoming a central holding in my portfolio.

[johndoe23] 28/6/2024 07:19

Fair amount of negativity here currently. I ask myself, can this be a better, larger entity in the future? Yes. 60M PBT with a mcap of 600M strikes me as decent value

[allstar_07] 26/6/2024 22:01

Vlx state in the results that the ev and consumer sectors saw improved demand in H2 so thats encouraging. They also say some of the decline in consumer is due to reduction of copper and pvc costs (although I couldn't see the figures). So, important to rem it's the profit that matters rather than headline revs (margin up 0.5% is encouraging).

[paraguay] 26/6/2024 16:26

Dr biotech. No way Jose, IC are so far behind, why didn't they state this 2 months back. Volex real growth will come from data centre cables etc.... Today's update shows that the real growing revenue stream. I remain invested having been here about 12 months.

[ijamlon] 26/6/2024 15:39

Let's not forget the share price was at 270 just over 2 months ago and had a huge re-rating following the positive April guidance. It's held on to almost all that gain, but without new better news a pause for breath is not unusual. As I've said before, it tends to do well in the month after results if not always on the day itself.

[dr biotech] 26/6/2024 15:34

IC says drop is based on concerns over the fall in EV/Consumer electronics. Also says the new investments will hit FCF. However its they have a great track record of growth and retains its buy rating.

--

Hopefully a better day tomorrow

[valhamos] 26/6/2024 11:57

Good results. With the creation of the Off Highway segment and gains in Medical and Complex Industrial, EV is by far the smallest of the 5 segments. Though pleased with the prospects of recovery in EV, I am hoping this will change the perception of VLX that it operates in diversified markets and is not reliant on the EV sector to turn out great results.

Pleased with the increase in operating margin to 9.8% in H2 which I guess is largely attributable to Murat Ticaret (was 9.3% in H1). In fact there is a lot more to come from the acquisition as it was only completed in August 23.

The announced increase in investment is a positive as VLX have a good track record of earning good returns on investment and would be disappointed if they were not taking advantage of cross-sell opportunities and for increased penetration of Off Highway in North America.

[disc0dave46] 26/6/2024 11:47

No probs. I too got the info as per mfhx2 link.Slightly concerning that their house broker has not changed their target price. On FY03/24 earnings of 26.6p, a fair rating of 15x gives c 400p (Peel Hunts target). I'd pencilled in +10% eps growth for FY03/25 to c 29.3p with a TP of 439/440. So is their broker saying minimal / no growth or what?.Hopefully some confirmation of FY03/25 forecasts will be forthcoming at Fridays Investor Presentation.

[pugugly] 26/6/2024 11:19

disco - Thanks -

[mfhmfh] 26/6/2024 10:49

I saw it on here, last paragraph:

[disc0dave46] 26/6/2024 10:41

They've just reiterated previous target and rating.

[pugugly] 26/6/2024 10:19

mfhmdh: Thanks Do you or anyone else know what was their previous taqrget?
No notes on Research Tree today.

[mfhmfh] 26/6/2024 10:13

Peel Hunt - 400p target price.

[disc0dave46] 26/6/2024 09:11

Looks like a slight beat to me, the caveat being how much of Murat Ticaret (MT) was factored into the forecasts.If you exclude MT's Rev contribution then group Rev growth was only 8%, which on comparatives was half previous years growth rate.Would have been nice to see the operating and pbt numbers just for MT.Debt may be putting folks off too, but IMO the BS doesn't look too stretched, despite finance charges increasing 77%.Pension deficit attributable to MT is also a slight negative at $4.5m.May wait until investor presentation to see what forecast numbers are now.

[ijamlon] 26/6/2024 08:54

Well said, the very strategy that has led them to multiply revenues, profits and share price over last ten years, ie investment, acquisition, adapting to new growth markets, is one that the average short-term, jam-today UK investor can't be bothered with. Their loss

[pireric] 26/6/2024 08:43

They're basically saying that there's going to be towards $50m of capex (up >50% y/y) and another $8m of opex going through the P&L (best part of 1% of margin investment).

The problem is not that they are investing. It's that you are going to see reduced broker FCF forecasts for FY25, as no-one as far as I would imagine was pencilling in that degree of capex. Blame the company CFO for not pre-spelling this out for the brokers ahead of time. As it's hard to think the stock should go up on a downward FCF revision

I can't work out whether P&L forecasts will go down on the back of investments as don't have a proper forecast stack and I doubt brokers are splitting out that investment line in their forecasts.

In other words, this reads like a small FCF ('cash profit') warning for FY25 so not sure why you're surprised the stock is down.

Eric

"In response to increasing customer demand, the Group invested in the further expansion of its global manufacturing base, creating additional capacity to facilitate growth as part of the Group's five-year growth plans. Total gross capital investment increased to $31.6 million (FY2023: $27.0 million), representing 3.5% of revenue (FY2023: 3.7% of revenue). The prior year expenditure included $8.7m of assets which were purchased under lease agreements. As well as expanding capacity to support future growth, investment was concentrated on high-growth areas, including EV and data centre capabilities. The investment strategy continues to be shaped by customer demand, localisation requirements and capability enhancements.

In FY2024, we made $8 million of operational investments to support growth. These investments include additional operating costs to enhance our operational capacity, expand our market presence, and drive innovation. This also encompasses increased depreciation expenses from additional capital investments and costs associated with scaling our organisation and manufacturing footprint, such as recruiting additional sales and engineering staff. These targeted expenditures are essential for scaling up our operations and positioning us for long-term success."

[blusteradjuster] 26/6/2024 08:19

This being London, the fact that a growth company is investing-for-growth (capex) rather than showering the dividends, is seen as a negative.

That and the itinerant trader gang bailing of course.

[tulley1] 26/6/2024 08:06

Wait for the investor presentation. I'm sure this will tick back up

[1goldfish] 26/6/2024 08:01

Nothing in these results or forward guidance should make anyone sell, it's a solid company, diversified, great prospects. Buy, add and hold.

[ijamlon] 26/6/2024 07:58

Perfectly solid results, though the dilution from new share issuance and the cost of financing debt means top line growth hasn't connected to the bottom line as well as before. It always trades weirdly on results day. Bet my bottom dollar the share price will be higher in a few weeks than it is today, maybe even after the results presentation.

[igoe104] 26/6/2024 07:49

Interesting to see they are opening a off highway business in North America. Also looks like the destocking issues in electric Vehicles is coming to a end...

[ayl30] 26/6/2024 07:43

I jumped in at 325p

[igoe104] 26/6/2024 07:38

Don't these always go down on results day ? Traders jumping in and out..